Our Ref. No. 94-417-CC

28 JUll994

Our Ref. No. 94-417-CC

RESPONSE OF THE OFFICE OF CHIEF COUNSEL First Coastal Corporation

DIVISION OF INVESTMENT MANAGEMENT File No. 132-3

By letter dated July 8, 1994, you request our assurance that

we would not recommend enforcement action to the Commission if

First Coastal Corporation (the "Company" ) dissolves and

liquidates its assets without registering under the Investment

Company Act of 1940 (the "Investment Company Act") in reliance on

the exemption in Section 7 (a) of the Investment Company Act for

"transactions which are merely incidental to the dissolution of

an investment company."

The Company is a bank holding company, incorporated in the

state of Delaware. Its common stock was delisted from the

National Association of Securities Dealers Automatic Quotation

System ("NASDAQ") on September 1, 1991. Coastal Savings Bank, an

FDIC- insured savings bank ("Coastal"), is a wholly owned

subsidiary of the Company. On April 26, 1994, the Company and

Coastal entered into a settlement agreement (the "Settlement

Agreement") with the FDIC that provides that the FDIC will

recei ve preferred stock in Coastal (the "Preference Stock"),

convertible into 95% of Coastal's outstanding common stock. ii

The Company's stockholders must approve the Settlement Agreement.

The closing of the Settlement Agreement is scheduled to occur

wi thin ten business days of stockholder approval. ~i

The Company intends to dissolve and liquidate. The

Company's Board of Directors has adopted a plan for the Company's

dissolution and liquidation (the "Plan"), and will submit the

Plan, as well as the Settlement Agreement, to stockholders for

approval at the annual stockholders' meeting, which is scheduled

for September 13, 1994. ~i The Plan authorizes, among other

things: (i) the filing of a certificate of dissolution (the

"Certif icate of Dissolution"); (ii) the winding up of the

Company's affairs; and (iii) the liquidation of the Company's

assets. The Company expects to complete the implementation of

ii The Preference Stock converts into Coasta 1 common stock upon

its disposition by the FDIC. You represent that the FDIC

will try to sell the Preference Stock as soon as possible on

terms the FDIC deems acceptable.

~i Telephone conversation between Edward J. Rubenstein and

James G. McMillan (July 26, 1994).

11 Telephone conversation between Edward J. Rubenstein and

James G. McMillan (July 26, 1994).

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;.the Plan a'nd liquidation of the Company as soon as practicable

after the stockholders approve the Plan. ~/

You also state that as of the closing of the Settlement

Agreement, the Company's assets are expected to be one

automobile, cash, and 100,000 shares of Coastal common stock

("Coastal shares"). Following the filing of the certificate of

Dissolution, and on paying, or providing for, all debts and

liabilities, the Company will distribute the Coastal shares, or

the proceeds received from the sale of the shares, to the

Company's stockholders. If the Company sells the Coastal shares,

the Company may, pending distribution to former stockholders,

invest the proceeds in u.s. government and agency securities,

certificates of deposit, and, to a limited extent, in shortterm, investment grade debt securities.

In addition, you represent that after the filing of the

certif icate of Dissolution:

-the Company will not issue any securities required to

be registered under the Securities Act of 1933, except

securities issued pursuant to existing employee stock

option plans;

-the Company will comply with all applicable reporting

and disclosure obl igations under the Securities

Exchange Act of i 934 ;

-the Company will not (and will not permit its

directors, off icers, or employees to) place

advertisements in the media promoting investment in the

Company on the basis of the composition of, or the

returns earned on, its portfolio;

-the Company will hold itself out as a company in the

process of liquidation, rather than as an investment

company;

~/ You represent that under the Delaware General corporation

Law (the "DGCL"), the Company's dissolution becomes

effective upon the execution and filing of a Certificate of

Dissolution with the Delaware Secretary of State. Under the

DGCL, however, the Company will continue as a corporate

enti ty for three years after the dissolution becomes

effective, or for such longer period as the Delaware Court

of Chancery directs, for the purpose of prosecuting and

defending suits by or against the Company and winding up the

Company's business and affairs, but not for the purpose of

continuing the Company's business.

2

-the Company will establish personnel policies to avoid

self-dealing by the Company's directors, officers, or

employees in connection with sales or other

dispositions of portfolio securities or property held

by the Company. Specifically, the Company will not

knowingly buy or sell any Coastal security, or any

other security or property, from or to (i) any of the

Company's directors, off icers, or employees, or (ii)

any other entities or persons affiliated (as defined in

Section 2 (a) (3) of the Investment Company Act) with the

Company or with any of the Company's directors,

off icers, or employees, except that the Company may

make the described pro rata distribution to all its

stockholders; and

-the Company will dissolve and sell or distribute all

of its assets within three years of the filing of the

Certif icate of Dissolution. 2/

We would not recommend enforcement action to the Commission

if the Company dissolves and liquidates in the manner described

in your letter. Any facts or representations different from

those in your letter may require a different conclusion.

('~u() ~i'/' '~

Edward J. Rube stein

Senior Attorney

2/ You represent that if it appears that the Company will be

unable to complete its liquidation wi thin three years, the

Company will apply to this Division for additional noaction relief. Of course, there can be no assurances that

the staff will grant that relief.

3

HAON

HOGAN &

COLUMBIA SQUAR

BRUSSELS

555 THIRTEENTH STREET NW

LONDON

WASHINGTON DC 20004-1109

PARIS

(202) 637-5600

PRAGUE

HOWARD 1. FLACK

PARTNER

WARAW

DIRECT DIA (202) 637-6538

BALTIMORE. MD

BETHESDA, MD

McLEAN, VA

July 8, 1994

q '10

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SEON

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BY HAND DELIVRY

Offce of Chief Counsel

Division of Investment Management

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

Attention: Edward J. Rubenstein

Re: First Coastal Corporation - Request for No-Action Letter:

Investment Company Act of 1940 - Sections 3(a) and 7(a)

Ladies and Gentlemen:

On behalf of First Coastal Corporation, a Delaware corporation (the

"Company"), we respectfully request that the staff (the "Stafr') of the Securities and

Exchange Commission (the "Commission") confirm to us that it will not recommend

that the Commission take any enforcement action if the Company proceeds to

dissolve and liquidate its assets in the manner set forth below without registering

as an investment company under Section 8 of the Investment Company Act of 1940

(the "1940 Act").

BACKGROUND INFORMATION

The Company is a bank holding company the common stock of

which

was delIsted from the National Association of Securities Dealers Automatic

March 31,1994, the

record by approximately 1,761 persons.

Quotation System ("NASDAQ") on September 1,1991. As of

Company's Common Stock was held of

the outstanding voting stock of

Suffield Bank, a Connecticut-chartered savings bank ("Suffield"), the deposits of

which were insured by the Federal Deposit Insurance Corporation (the "FDIC").

Prior to September 6, 1991 the Company held all of

\ \ \DC\55926\0008\LT006101.DOC

FAX: (202) 637-5910 TELEX: 248370(RCA), 892757(W CALE: HOGANDER WASHINGTON

HOGAN & HAON L.L.P.

July 8,1994

Page 2

On September 6,1991 the Connecticut Banking Commissioner determined that

Suffeld was insolvent and appointed the FDIC as receiver. Through its

intermediate holding company Coastal Bancorp, a Maine corporation ("Coastal

Bancorp"), 1/ the Company also wholly owns Coastal Savings Bank, an FDICMaine ("Coastal"). On

September 1, 1993 the FDIC issued a Notice of Assessment against Coastal for its

insured savings bank organized under the laws of

claimed losses in connection with Suffeld pursuant to 12 C.F.R. § 308.166 which

provides that an insured depository institution shall be liable for any loss incurred

or reasonably anticipated to be incurred by the FDIC in connection with the default

of a commonly controlled insured depository institution.

On April 26, 1994, the Company, Coastal, Coastal Bancorp and the

FDIC entered into a Settlement Agreement (the "Settlement Agreement"), which

the Settlement

provides for the settlement of

the FDIC's claims. As part of

Agreement, the FDIC will be issued preferred stock in Coastal (the "Preference

Stock") which will be convertible into shares of Coastal common stock representing,

on a post-conversion basis, 95% of the outstanding Coastal common stock. The

remaining 5% of Coastal's post-conversion common stock wil be held by the

Company as a result of the dissolution of Coastal Bancorp. The Settlement

Agreement also contemplates that the Company will file a Certificate of Dissolution

with the Secretary of State of the State of Delaware. 2/

The Company intends to schedule a stockholders' meeting in the latter

part of August 1994. At this meeting, the Company's stockholders will be asked to

approve, among other things, both the Settlement Agreement and a Plan of

Dissolution and Liquidation with respect to the dissolution and liquidation of the

Company.

1/ The Company expects to dissolve and lIquidate Coastal Bancorp by the end of

July 1994, with the effect that Coastal Savings Bank wil become a direct whollythe Company.

owned subsidiary of

2./ The Settlement Agreement may be terminated by the FDIC if, among other

things, the stockholders of the Company fail to vote to approve the settlement, or

approve the settlement but a Certificate of Dissolution is not filed within 10

business days after the date of the stockholders' meeting or such later date as the

parties may agree in writing.

\ \ \DC\55926\0008\LT006101.DOC

HOGAN & HAON L.L.P.

July 8, 1994

Page 3

Under the Delaware General Corporation Law, as amended (the

"DGCL"), the dissolution of the Company becomes effective upon the execution and

Dissolution with the Secretary of State of the State of

fing of a Certifcate of

Delaware. Under the DGCL, the Company will continue as a corporate entity for

three years after the dissolution becomes effective, or for such longer period as the

Delaware Court of Chancery directs in its own discretion, for the purpose of

prosecuting and defending suits by or against the Company and winding up the

business and affairs of the Company, but not for the purpose of continuing the

the Company.

business of

As a result of the Settlement Agreement, the Company will have

virtually no assets other than its holdings of the common stock of Coastal and a

lImited amount of cash. The Settlement Agreement prohibits any distribution to

the stockholders of the Company other than the shares of Coastal common stock it

holds (or the cash proceeds received by the Company from the sale of such shares)

and cash in lieu of fractional shares. All cash assets of the Company, if any,

the Company, if

by the Company directly to Coastal or to the FDIC as set forth in

remaining after paying or providing for all debts and liabilities of

any, are to be paid

the Settlement Agreement.

Upon conversion of the Preference Stock, which according to its terms

will occur when the FDIC sells the Preference Stock, the Company's common stock

interest in Coastal wil be diluted from a 100% ownership interest to a 5%

ownership interest. 'Q/ Because after conversion of

will cease to be a majority-owned subsidiary of

the Preference Stock, Coastal

the Company, the Company will no

longer fall under the exemption from the definition of investment company provided

banking

through majority-owned subsidiaries.

by Section 3

(c)

(6) of

the 1940 Act for persons engaging in the business of

'i The Company understands that the FDIC will undertake to sell the

Preference Stock to a third party or parties as soon as possible on terms the FDIC

deems acceptable.

\ \ \DC\55926\0008\LT006101.DOC

HOGA & HAON L.L.P.

July 8, 1994

Page 4

ANALYSIS

Registration under the 1940 Act

Subsequent to the conversion of the Preference Stock and prior to the

Company's ultimate discontinuation under the DGCL, the Company may be deemed

an investment company under Section 3(a)(1) of the 1940 Act. Section 3(a)(1)

broadly defines an investment company as any issuer which "is or holds itself out as

being engaged primarily, or proposes to engage primarily in the business of

investing, reinvesting, or trading in securities. II The Company does not, and will

not, engage primarily or hold itself out as engaging primarily in the business of

investing, reinvesting or trading in securities. Once the Company files its

Certificate of Dissolution, the Company's sole business activity will be settling the

claims of creditors, winding up its affairs and liquidating its remaining assets.

While it is possible that the Company may sell its remaining shares of Coastal

common stock to the person or persons to whom the FDIC sells the Preference

Stock, such a transaction is only ancillary to the Company's plan of liquidation.

Accordingly, it is our view that since the Company will be engaged primarily in the

process of dissolution, the Company should not be construed as being primarily

engaged in the investing, reinvesting or trading in securities and thus wil not be an

investment company within the meaning of Section 3(a)(1) of the 1940 Act.

Alternatively, even if the Company were deemed to be an investment

company, it is our view that it would nevertheless be exempt from the registration

requirements of Section 8 by virtue of the exemption provided by the last sentence

the 1940 Act. Section 7(a) permits an unregistered investment

company to engage in "transactions by an investment company which are merely

incidental to its dissolution." As explained above, once the Company files a

Certifcate of Dissolution it will not engage in any transactions or any business

of Section 7(a) of

except that which is designed to facilItate the Company's orderly dissolution.

The Staff

has granted several favorable responses under Section 7(a)

in similar situations. See e.g., The Fund American Co. Inc. (pub.avail.

November 16,1990); LDX Group. Incorporated (pub.avail. May 4,1990); Keyes

Offshore Limited (pub.avail. October 20. 1986); Merit Clothing Company (pub.avail.

March 29,1982); Sinclair Venezuelan Oil Company (pub.avail. November 8,1979);

Atlanta/LaSalle Corporation (pub.avail. May 18, 1979). Nor should it matter that

the eventual cessation of the Company does not occur for three years. In situations

where a plan of liquidation exists, where circumstances (such as the identification

\ \ \DC\55926\0008\LT006101.DOC

HOGA & HAON L.L.P.

July 8, 1994

Page 5

and satisfaction of creditors) preclude the immediate liquidation and dissolution of

the corporation and where the lIquidation and dissolution will be accomplIshed

within a limited period, the Staff has recognized that an orderly liquidation process

is in the interest of stockholders. For example, in Merit Clothing- Company the

Staff permitted a liquidation period to extend for up to ten years and in Keves

Offshore Limited for up to two years.

In recent years, the Staff also has issued a number of no-action letters

in similar circumstances where the entities concerned formed lIquidating trusts

which would make final distributions of assets in not more than three years.

See e.g-., Oppenheimer Landmark Properties (pub.avail. March 9, 1993); VH

Enterprises, Inc. (pub.avail. January 7, 1993); Graphic Scanning- Corporation

(pub.avail. August 21, 1991); Crime Control. Incorporated (pub.avail August 3,

1987). As stated in LDX Group and Keves Offshore Limited, however, formation of

a lIquidating trust should not be the determining factor as to whether the

Section 7(a) exemption is available because the substance of

the dissolution is the

same whether or not a liquidating trust is formed.

Because the only activities the Company wil engage in will be those

activities conducive to the Company's liquidation and dissolution, it is our opinion

that registration of the Company under Section 8 of the 1940 Act is not required.

To assist in your consideration of this request, please be advised that

the Company has advised us of the following:

1. The Board of Directors of the Company will adopt a plan for the

dissolution and liquidation of the Company substantially in the form attached

hereto as Exhibit A (the "Plan") and will submit the Plan to its stockholders for

approval at the annual meeting of stockholders currently scheduled to be held in

August 1994.

2. The Plan, among other things, authorizes the offcers and directors

of the Company to: (i) dissolve the Company in accordance with the applicable

provisions of the Delaware General Corporation Law, as amended (the "DGCL"),

including the execution and filing of a certificate of dissolution (the "Certificate of

Dissolution") with the Secretary of State of the State of Delaware, (ii) wind up the

Company's affairs and (iii) lIquidate the Company's assets.

\ \ \DC\55926\0008\LT006101.DOC

HOGAN & HAON L.L.P.

July 8, 1994

Page 6

The Company expects to file the Certifcate of Dissolution at or shortly

after the closing of the Settlement Agreement, dated as of April 26, 1994 (the

"Settlement Agreement"), and to complete the implementation of the Plan and the

liquidation of the Company as promptly as practicable thereafter. Upon the

payment of or reasonable provision for all debts and lIabilities of the Company in

accordance with the requirements of the DGCL, the Company will distribute all

remaining assets, if any, to the former stockholders of the Company. Under the

DGCL, the dissolution of the Company becomes effective upon the execution and

filing of a Certifcate of Dissolution. Under the DGCL, the Company wil continue

as a corporate entity for three years after the dissolution becomes effective, or for

such longer period as the Delaware Court of Chancery directs in its own discretion,

for the purpose of prosecuting and defending suits by or against the Company and

winding up the business and affairs of the Com.pany, but not for the purpose of

continuing the business of the Company: The Plan provides that the

implementation of the Plan is intended to be completed within three years of the

filIng of the Certificate of Dissolution. The Company understands that any noaction relief given by the Staff would be valId only for three years. If it appears

that the Company will not complete the distribution of its assets and

implementation of the Plan within such three-year period, the Company hereby

undertakes to apply to the Division of Investment Management for additional relief

under Section 7 (a) of the 1940 Act prior to the expiration of such three year period.

3. Upon the consummation of the Settlement Agreement, the

Company's assets are expected to consist of one automobile, cash, and 100,000

Bank Common Stock"),

representing five percent of the outstanding Bank Common Stock on a fully-diluted

basis. Following the filIng of the Certificate of Dissolution with the Secretary of

shares of common stock of Coastal Savings Bank (ii

State of the State of Delaware, the Company wil dispose of its assets as provided in

the Settlement Agreement and the Plan, and upon the payment of or provision for

all debts and lIabilIties in accordance with the DGCL, wil distribute the 100,000

shares of Bank Common Stock, or the proceeds received by the Company from the

sale of such shares, to the former stockholders of the Company.

4. To the extent that the Company sells or otherwise disposes of the

100,000 shares of Bank Common Stock prior to their distribution to the

stockholders of the Company, the Company wil invest the proceeds from such sale

or disposition in cash, U.S. government and agency securities, certificates of

deposit, and, to a limited extent, short-term, investment grade debt securities

pending distribution to stockholders as determined by the Board of Directors.

\ \ \DC\55926\0008\LT006101.DOC

HOGA & HAON L.L.P.

July 8, 1994

Page 7

5. During the lIquidation period, the Company will not issue any

equity or debt securities required to be registered under the Securities Act of 1933,

as amended, except securities issued pursuant to existing employee stock option

plans.

6. The Company wil establish personnel policies commencing upon

the filing of the Certificate of Dissolution that will be designed to avoid the

possibilIty of self-dealing by the Company's officers, directors, or employees in

connection with sales or other dispositions of portfolio securities or property held by

the Company. Specifically, the Company will not knowingly buy or sell any Coastal

Savings Bank security, or any other security or property, from or to any director,

officer or employee of the Company, or any entity or person affilIated, as defined in

(3) of the Investment Company Act, with the Company or a Company

director, officer or employee, except that the Company may make a pro rata

distribution to all stockholders of the Company.

Section 2

(a)

7. Following the filing of the Certificate of Dissolution with the

Secretary of State of the State of Delaware, the Company will hold itself out as a

company in the process of liquidation, rather than as an investment company.

While the Company will comply with applicable reporting and disclosure

requirements under the Securities Exchange Act of 1934, as amended, until such

reporting and disclosure obligations cease to be required, the Company will not (and

wil not permit its directors, offcers, or employees to) place advertisements in the

media promoting investment in the Company on the basis of the composition of or

the returns earned on its portfolIo.

If you have any questions or comments regarding the foregoing, please

do not hesitate to contact the undersigned.

Very truly yours,

~~~

Howard 1. Flack

cc: Charles B. McCarty

Securities and Exchange Commission

James H. Whittaker

First Coastal Corporation

\ \ \DC\55926\0008\LT006101.DOC

EXHIBIT A

PLA OF DISSOLUTION AN LIQUIDATION

OF

FIRST COASTAL CORPORATION

This PLA OF DISSOLUTION AN LIQUIDATION (the "Plan") is for

the purose of effecting (i) the complete voluntary dissolution of First Coastal

ii), in accordance with the

applicable provisions of the Delaware General Corporation Law, as amended (the

Corporation, a Delaware corporation (the ii

Corporation

"DGCL") and (ii) the lIquidation of the Corporation's assets pursuant to

Sections 332 and 337 of the Internal Revenue Code of 1986, as amended (the

"Code"), in substantially the following manner:

1. Authorization and Aooroval of the Plan. This Plan shall be

submitted to the stockholders (the "Stockholders") of the Corporation,

in accordance with the requirements of Section 275 of the DGCL, for

authorization and approval at an annual meeting (the "Annual

Meeting") of the Stockholders. This Plan shall be considered

a uthorized and approved by the Corporation and shall become effective

when the holders of a majority of the outstanding shares of common

stock, par value $1.00 per share (the "Common Stock"), of the

Corporation authorize and approve the dissolution and liquidation of

the Corporation in accordance with the Plan and the requirements of

Section 275(b) of the DGCL; provided, however, as set forth in the

proxy materials prepared and distributed to the Stockholders in

connection with the Annual Meeting, the Plan shall not become

effective unless and until the holders of a majority of the outstanding

shares of Common Stock of the Corporation shall have approved the

Settlement Agreement, dated as of April 26, 1994, as amended

June _, 1994, by and among the Federal Deposit Insurance

Corporation ("FDIC"), Coastal Savings Bank ("CSB"), Coastal Bancorp

and the Corporation (the "Settlement Agreement").

2. Filngs. Afer the Stockholders have authorized and approved

this Plan, the offcers and directors of the Corporation are authorized'

to take all steps necessary or appropriate to (i) dissolve the

Corporation in accordance with the applIcable provisions of the DGCL,

including, but not lImited to, the execution and fing of a Certifcate of

Dissolution with the Secretary of State of the State of Delaware,

(ii) wind up the Corporation's affairs and (ii) lIquidate the

Corporation's assets in accordance with the applIcable provisions of

\ \ \DC\57492\OOOl\AG000301.DOC

the

Code, including, but not lImited to, the execution and fing of any tax

returns, certifcates, documents and inormation returns required to be

fied with the Internal Revenue Servce, the Delaware Department of

Revenue, and any other appropriate authority due to the dissolution of

the Corporation and the liquidation of its assets.

3. Effective Date. The date on which the Corporation fies a

Certifcate of Dissolution with the Delaware Secretary of State shall be

the Effective Date.

4. Payment and Distribution to Claimants. Commencing on the

Effective Date, the offcers and diectors of the Corporation, in the

discretion of the board of directors of the Corporation then in offce (the

"Board"), shall (i) payor make reasonable provision to pay all claims

and oblIgations, including all contingent, conditional, or unmatured

contractual claims known to the Corporation, (n) make such provision

as wil be reasonably liely to be suffcient to provide compensation for

claims that have not been made known to the Corporation or that have

not arisen but that, based on facts known to the Corporation, are liely

to arise or to become known to the Corporation prior to the expiration

of the applIcable statutes of limitation, (il) make the FCC Payment (as

defined in the Settlement Agreement), if any, to CSB in partial

discharge of the Corporation's oblIgation to the FDIC, as set forth in,

and subject to the terms and conditions of, Section 8.1 of the

Settlement Agreement and (iv) make the Additional FCC Payment (as

defined in the Settlement Agreement), if any, to the FDIC in partial

discharge of the Corporation's oblIgation to the FDIC, as set forth in,

and subject to the terms and conditions of, Section 8.2 of the

Settlement Agreement. Al claims of the Corporation shall be paid in

full and any such provision for payment made shall be made in full if

there are suffcient funds pursuant to the requirements of Sections 4(i)

and (ii) of this Plan. If there are insuffcient funds, such claims and

oblIgations of the Corporation shall be paid or provided for according to

their priority and, among claims of equal priority, ratably to the extent

of funds legally available therefor.

5. Distribution to Stockholders. Upon the satisfactory completion

of the requirements of Sections 4(i) and (ii) of this Plan, the offcers

and directors of the Corporation shall distribute in one or a series of'

distributions, at any time or from time to time, and in any manner

that the Board, in its discretion, may determine, up to 100,000 shares

of common stock, par value $1.00 per share, of CSB, or the proceeds

received by the Corporation from the sale of such shares, to the

Stockholders in exchange for and in complete cancellation of all of the

issued and outstanding Common Stock of the Corporation and on a pro

\ \ \DC\57492\OOOl\AG000301.DOC

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rata basis in accordance with the respective interests of the

Stockholders in the Corporation. The respective interests of the

Stockholders shal be fied on the basis of the ownership of their

outstandig shares of Common Stock of the Corporation on a record

date to be determined by the Board. Cash shall be paid in lieu of the

issuance of fractional shares.

6. Cessation of Business. Promptly after the Effective Date, the

Corporation shal withdraw from all jursdictions in which the

Corporation is qualed to do business and shall not engage in any

business activities, other than to wind up the Corporation's business

and affairs under the applicable provisions of the DGCL and in

accordance with this Plan. The Board and, at the pleasure of the

Board, the offcers, shal continue in offce for that purose.

7. Authoritv of Offcers and Directors. The offcers and diectors of

the Corporation shall have the authority to carry out and implement

the provisions of this Plan, includig, but not liited to, the authority

to:

(i) sell, exchange, lease or otherwise dispose of any assets,

~.':

other than cash, of the Corporation to any person or persons to

the extent such transaction can be accomplished for

consideration and upon terms and conditions deemed by the

Board to be in the best interests of the Corporation and the

Stockholders;

(n) do, on behalf of the Corporation, all acts required to be

done by the Corporation under this Plan or the applicable

provisions of the DGCL and the Code;

(il) provide for one or more lIquidating trustees or receivers

for the benefit of the Corporation's creditors and stockholders,

includig but not liited to trustees under a liquidating trust

agreement and transferring to them (A) any assets the retention

of which may be advisable to meet claims or expenses, and

(B) any assets held on behalf of Stockholders who cannot be

located; and

\ \ \DC\57492\OOOl\AG000301.DOC

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(iv) adopt all resolutions, execute all documents, :fe all

papers and take al other actions deemed necessary or

appropriate to effect the dissolution of the Corporation and the

complete liquidation of its business, assets and affairs; it being

understood that nothig contained in this Section 7 shall be

construed to permit the offcers or diectors of the Corporation to

take any action which is inconsistent with the requiements of

the DGCL or with Sections 332 or 337 of the Code.

8. Authority of the Board. Pursuant to the authority granted to

the Board by Section 275(e) of the DGCL, notwithstandig the

authorization or consent of the Stockholders to the Plan (or the

authorization and approval of the Plan by Stockholders), the Board

may abandon this Plan and the proposed dissolution of the Corporation

at any time prior to the Effective Date without fuher action by the

Stockholders.

9. Comoletion of Dissolution and Liauidation. It is intended that

the implementation of this Plan be completed withi three (3) years of

the Effective Date.

\ \ \DC\57492\OOOl\AG000301.DOC

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